Multiple individuals convicted in crackdown on unlicensed marijuana dispensary industry

Date: June 30, 2022

Contact: newsroom@ci.irs.gov

SAN DIEGO — Shahram "Sean" Sheikhan and Sabriana Williams pleaded guilty in federal court today to drug distribution charges, the latest individuals convicted as part of an ongoing investigation by federal and state authorities targeting unlicensed, illegal marijuana dispensaries throughout Southern California.

From at least 2019 through 2022, Sheikhan and Williams, along with others, operated an unlicensed, illegal marijuana business known as "Cannaland," which functioned primarily as a wholesale supplier of marijuana and marijuana products to unlicensed and illegal marijuana dispensaries in Southern California. Additionally, Cannaland operated as an unlicensed, illegal marijuana dispensary in its own right, serving individual customers.

In April 2021, law enforcement executed a search warrant at Cannaland, which at the time was located at 10630 Willie Baker Way in Spring Valley, California. During the execution of the search warrant, more than 3,000 pounds of marijuana was seized, with an estimated street value in excess of $6 million, along with five firearms. Following the search warrant, Sheikhan and Williams personally coordinated and facilitated the procurement of replacement firearms for the business' armed security guards and continued to operate their business and distribute vast amounts of marijuana. As part of their plea agreements, Sheikhan and Williams admitted the amount of marijuana products distributed during the course of the conspiracy exceeded 3,000 kilograms.

Sheikhan and Williams join several others who have pleaded guilty to various drug, firearm, and money laundering charges in federal court as part of this investigation.

"Over the last two years, federal and state law enforcement targeted the operation of dozens of illegal, unlicensed marijuana dispensaries in San Diego County in order to enforce the law and curtail the related crime alleged in this case," Grossman said. He thanked the prosecution team and the investigating agencies for their efforts to protect the community.

"IRS has been a part of the Organized Crime Drug Enforcement Task Force (OCDETF) for over 30 years. 'Stronger Through Partnership' is the OCDETF motto, and the success of this highly impactful investigation truly exemplifies that motto," noted Ryan L. Korner, Special Agent in Charge of the Los Angeles Field Office of IRS-Criminal Investigation (IRS-CI). "The primary motivation of drug traffickers is greed. They don't care how their actions negatively impact innocent people, the community, or our society. The role of IRS-CI is to fully dismantle these criminal organizations by following the money that fuels the drug trade, and ultimately ensure that the peddlers of these illicit drugs do not reap the benefits of their criminal activity."

"The FBI is committed to keeping our communities safe from the vast array of violent crimes and criminal activity which accompanies these illegal establishments," said FBI Special Agent in Charge Stacey Moy. "I want to thank our law enforcement partners at the San Diego County Sheriff's Department, the San Diego Police Department, the Chula Vista Police Department, the Internal Revenue Service, the United States Attorney's Office for the Southern District of California, and the San Diego County District Attorney's Office for their commitment and collaboration on these cases. It's these ongoing partnerships which enable law enforcement from around the county to be agile and able to handle these types of cases using a variety of investigative techniques with different prosecutive options."

"The Sheriff's Department has been a proud partner in the collaborative law enforcement response to organized criminal activity related to unlicensed marijuana distribution in the East County," said Kelly A. Martinez, Undersheriff of the San Diego County Sheriff's Department. "Sheriff deputies, investigators, and analysts committed countless hours of investigative support, surveillance, and analysis to this effort. Today's outcome is a culmination of the dedication of federal, state, and local law enforcement partnerships in the region which are the hallmark of public safety in San Diego. East San Diego County is safer today because of this hard work."

"This operation demonstrates that strong partnerships, including participating on federal task forces, keeps our community safe," said San Diego Police Department Chief David Nisleit. "The San Diego Police Department is committed to working with neighboring law enforcement agencies to combat organized crime in our region. We are proud of the work that has been done to close these illegal distribution centers and stop the violent crime associated with them."

"Illegal marijuana dispensaries have been responsible for numerous complaints by our community members," added Chula Vista Police Department Chief Roxana Kennedy. "We've seen many of them open up near our schools over time. They pose a significant health and safety hazard to the public, especially our youth, and they move around trying to avoid enforcement. Collaborating with our law enforcement partners in the region and pooling our resources to stop these criminal organizations from putting our communities at risk is absolutely critical."

To date, law enforcement has executed dozens of search warrants and charged more than 30 individuals with violating state and federal law. As a result of this joint effort, law enforcement has seized nearly 30,000 pounds of marijuana and marijuana products; 68 firearms, including ghost guns; and millions of dollars in currency, jewelry, and other valuables. Nearly 30 unlicensed, illegal marijuana dispensaries and wholesale distributors have been shut down as a result.

Of those who have been charged, two groups of individuals recently pleaded guilty in federal court besides Sheikhan and Williams.

The first group, headed by Lance Kachi, admitted to operating multiple unlicensed, illegal marijuana dispensaries in Spring Valley and El Cajon, including locations at 9545 Campo Road, 9600 Campo Road, 9070 Jamacha Road, 985 Greenfield Drive, and 9143 Birch Street. Since at least 2020, Kachi, Michael Yono, Avrin Yakou, Fabian Yakou, and others, oversaw multiple unlicensed dispensaries that would each generate up to $25,000 daily, and were open 24 hours a day, seven days a week.

Kachi and his coconspirators grossed millions of dollars in revenue from their illegal, unlicensed operation. Several times a week, Kachi and others would meet at various hotels where they would spend hours counting hundreds of thousands of dollars in dispensary proceeds using automated money counters. Before leaving the room with bags of money, the defendants would pack up their money counters as well as the various notes they took to account for their profits and expenses, such as the cost of armed security.

In July 2021, law enforcement executed multiple search warrants targeting the Kachi operation. In May 2022, Kachi, Yono, and the Yakou brothers pleaded guilty to various drug, firearms, and money laundering charges, as well as the forfeiture of millions of dollars in cash, jewelry, and other valuables.

Also in May 2022, a second group, comprised of the Shamoun brothers – Sean, Alvin, Vincent, and Andrew – pleaded guilty in federal court to charges stemming from their wholesale distribution of marijuana products to unlicensed, illegal marijuana dispensaries from Los Angeles to San Diego. Operating under the name of Babylon's Garden, the Shamoun brothers manufactured a variety of marijuana products at a warehouse in San Diego, which they would deliver directly to dispensaries or ship in the United States mail. The Shamoun brothers admitted that their operation was responsible for the manufacturing and distribution of more than 3,000 kilograms of marijuana.

In their plea agreements, all the various defendants referenced above admitted that they had an obligation to report their income to both the Internal Revenue Service ("IRS") and California state tax authorities, as well as pay taxes on any income derived from these illegal businesses, which they failed to do. Additionally, all individuals agreed to forfeit seized cash, which currently exceeds $5 million.

This case is the result of ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.